Above the Law

Has anything changed or is property development in Egypt business as usual; teeming with corruption and money making deals to benefit the connected few? In Cairo, influential private land developers are intricately connected to government patronage systems. They benefit from discounted land prices and are directly given government land in violation of official land auction laws.

An article in AlMasry AlYoum just two days ago summarizes the Egyptian government’s continued struggle to settle issues on pre-revolution contracts with property developers. A committee to negotiate settlements, with hopes of avoiding arbitration, has been set up and is headed by Prime Minister Essam Sharaf. This special committee has its work cut out for it; it is working to settle 20 foreign and local investor contract issues, including contracts with Al Futtaim and Omar Effendi.

Demands in Tahrir Sqaure echoed the Egyptian people’s desire for justice to be served, for corruption to be cut at the root, and for government officials to be held accountable under the law. However, with occurrences such as the acquittal of Anas al-Fikki, Youssef Boutros-Ghali, Ahmed el-Maghribi and Yaseen Mansour, trust in the process wanes.

The question is, will an attempt to negotiate with investors bring about the change that people want to see? In early May of this year, and in part as a result of the Damac suit, the government discussed a law that could absolve corrupt investors from criminal liability. Even earlier, in April, the Ministry of Agriculture discussed a bill which would legitimize land contracts made under Mubarak’s rule, allowing owners to escape punishment. It seems that the so-called negotiations are simply an attempt for a swift resolution with little attention paid to what was taken from the people of Egypt.

The core of the issue is a matter of priorities, and the government’s priorities should lie with the interest of their citizens. Instead of attempting to encourage investment by pardoning the scandals, the government should strive to better understand the housing needs in Cairo and then encourage private investment in appropriate projects.

There are several factors that have led to investment being distributed unevenly – away from public housing. Between 1952 and 1962, a series of rent control caused the private sector withdrawal from an unprofitable rental housing market. Following the 1967 war there was also a major reduction in public investment in housing and infrastructure. Under Anwar Sadat, Law Number 178 for Egyptian Land Reform – which increased equitable access to land and redistributed 12% of Egyptian land – was abolished and the number of landless people eventually increased. Informal areas continued to expand with the combination of a low supply of affordable housing, an end to land reform, and a decrease in options for low and middle-income Cairenes.

Then, a 1974 state policy of constructing desert cities concentrated public investment in new cities with little left for housing supply in existing cities, and resulted in the unbalanced development in new cities.

The negotiations between the government and property developers exemplify the legitimacy crisis that brought about the revolution, and if the process to settle them is not ultimately fair, then hope in an equally fair process of future contracts and deals seems less likely.

The need for dedicated and sound social research drawing from diverse expertise and with wholly sincere motives is imperative if the cries of the revolution are to be truly upheld. If you have any updates on the issues in the article, additional resources, or projects working towards a better understanding of the housing needs in Cairo, please share with the team via comments or an email to cairofrombelow@gmail.com.

Many thanks to Dana for this interesting post. An article in this month’s edition of Foreign Affairs about the role of the Military transitional government in post-revolution context surrounding land, local councils and patronage may be of interest to readers:

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